Investor Relations

Before launching an all-out offensive against an activist investor, both sides should consider a middle path. No one has a monopoly on wisdom, and often an activist will have a worthwhile suggestion. Moreover, being willing to listen to properly presented ideas from a significant shareholder is part of a CEO’s and a board’s fiduciary responsibility.

2014 marked an incredibly strong year for manufacturing M&A. The sector saw deal value more than double and a 40% jump in deal volume compared to the prior year. The number one destination for private equity investment, the sector inked two dozen mega-deals (those with value of +$1 billion) and activity remained robust into the end of the year even as concerns grew around the fall of energy prices.

Any time an activist investor goes after your company, it’s a crisis. When Paulson & Company went after The Hartford and pushed it to split the company in two, the CEO and board members were shocked. But they were able to turn the crisis into an opportunity by following a few key behaviors. Here, in his own words, is former CEO Liam McGee's success story.

Attacks on CEOs of large public companies continue to make the news daily. There are lots of ways for CEOs to try to ward off such threats—and most of them have to do with just running a company the right way, with a clear strategy, optimizing opportunities, minding the bottom line, and being able to think like both shareholders and corporate raiders. But what if the wolf is already at the door, and is winning your loyal constituents over to their side? What can and should CEOs do once an activist shareholder has selected him, her, the board or the company as his prey?

Value sharing attracts the best talent and magnifies results. Effectively designed value-sharing plans reinforce the company’s business model, protects against bad profits and promotes good profits. It also promotes an ownership mindset and builds trust while accelerating results.

An increasing number of corporate chiefs are seeing activist investor groups knocking at their doors demanding they do a better job of running the show. Among the targets are Yahoo CEO Marissa Mayer and Zoetis CEO Juan Ramon Alaix.

As CEOs watch the continued economic uncertainty around the globe, many remain hesitant to invest their companies’ cash in building factories, buying new equipment or hiring more workers. So, more of them have been turning to another way to deploy idle financial assets: buying back the company’s own stock.

For companies in cannabis country, maybe it’s time to separate the weed from the chaff.

CEOs and boards of directors are feeling the pressures of increased stakeholder activism and scrutiny. When asked in the RHR International 2013 CEO Snapshot Survey about the current biggest threat to their tenure, 22 percent of CEOs cited “failure to perform to stakeholder expectations,” compared to just 12 percent in January 2012. In addition, more than half (57%) say that they will be driving a change in their company’s strategy this year.

A serial entrepreneur and angel investor tells how consistent communication and strong relationships with investors will make it easier for executives to raise capital and leverage investor resources for their company’s growth.